How to Remove Errors From Your Credit Report – Step-by-Step Guide

Riya, a 27-year-old marketing executive, was always in control of her finances. She had a credit card with a ₹1,50,000 limit and a ₹5,00,000 personal loan, both of which she paid off in a timely manner.

When Riya submitted her application for the ₹40,00,000 house loan, the bank immediately denied it.

Reason? Credit score only 580! It was a total “Dil toot gaya” moment.

Shocked, she checked her credit report and found a ₹50,000 unpaid loan under her name—one she never even took! “Yeh kaise ho sakta hai?!”

Without wasting time, she went into full “Jugaad Mode”:

• She quickly filed a dispute through the credit bureau.
• She attached all the proof (bank statements, ID verification).
• Kept following up through emails and calls.
• In just 30 days, the mistake was fixed, and her score shot back up to 780!

To stay protected, checking your credit report at least every three to six months is essential. Otherwise, you might get a "bina bataye bijli gir gayi" moment when you least expect it!

Step 1: Check If Your CIBIL Score Is Giving You a Shock!

Think of this: You apply for a loan with confidence, hoping for easy approval, but “Dhoka Ho Gaya”—your loan is rejected due to a low CIBIL score. But what if the low score is not because of your mistakes? Hisaab galat ho toh kya karein?

Don't panic first; verify your credit report for errors. Errors are more frequent than you imagine, and correcting them can immediately raise your score.

How a Small Error Can Cost You Big?

Ravi, a 30-year-old IT employee, recently applied for a ₹10,00,000 personal loan. He was sure of it since he had never missed an EMI payment. But to his surprise, his application was rejected due to his CIBIL score of just 600 rather than the promised 750+.

On checking his credit report, he discovered:

• A ₹50,000 bank credit card debt from an account he never had.
• A ₹2,00,000 loan repayment is overdue, though he had repaid it half a year back.

How He Corrected It in 30 Days?

• Verified his credit report and located the mistakes.
• Complained against the credit bureau, furnishing evidence of payment and account history.
• Checked frequently, and the mistakes were eliminated within 30 days.
• With correction, his CIBIL score increased from 600 to 780, and his loan was sanctioned with ease.

Step 2: Identify the Errors That Are Hurting Your Credit Report

Mistakes on your credit report can decrease your CIBIL score and cause surprise loan rejections. Here's the reason they occur and how they affect your financial wellness:

1. Wrong Identity

• Problem: Another person's loan shows on your report because of an Aadhaar or PAN mislink.
• Example: Raj sought a car loan of ₹8,00,000 but was rejected. His report reflected an unpaid ₹1,50,000 personal loan that he never borrowed! A mistaken Aadhaar number mix-up was responsible for this blunder.

2.  Mismatched Loan Details

• Problem: A loan that you never borrowed is highlighted as active.
• Example: Meera discovered a ₹50,000 credit card from a bank she had never had an account with. This mistake reduced her CIBIL score from 780 to 620.

3. Payment Mismatch

• Problem: You paid on time, but the report indicates "Late Payment".
• Example: Amit paid his ₹25,000 EMI on time every month, but his report reported a 90-day delay. His score decreased from 770 to 690, and he became ineligible for a home loan.

4.  Duplicate Accounts

• Problem: A single loan is shown more than once, so it seems like you owe more money than you do.
• Example: Priya had one housing loan of ₹35,00,000, but it was shown twice. This led lenders to believe she had a debt burden of ₹70,00,000, which lowered her eligibility for a loan.

5.    Old Loans Still Showing

• Problem: The closed loans are not reflected as "Closed" in your report.
• Example: Arjun cleared a ₹5,00,000 personal loan two years ago, but his report still reflected it as active. It brought his score down by 50 points, impacting his business loan prospects.

How to Fix These Errors?

1. Monitor your credit report every 3 to 6 months.
2. If you notice an error, submit a dispute to the credit bureau.
3. Present required documentation (payment receipts, loan statements).
4. Follow up frequently to ensure corrections are made.

Step 3: Get Your Credit Report from Trusted Sources

You are entitled to one free credit report per year from each of the major credit bureaus in India.

Step 4: Raise a Dispute With The Credit Bureau

Did you discover an error on your credit report? Don't worry—correction is a cakewalk! All credit bureaus enable you to dispute online. “Ek simple form bhariye, aur kaam ho gaya!”

Steps to Dispute an Error:

1. Log in to the bureau's website: Go to the official site of CIBIL, Experian, Equifax, or CRIF High Mark.
2. Fill out the dispute form: State the incorrect information and furnish the right facts.
3. Upload supporting documents: This may be loan statements, payment receipts, or ID proofs to support your claim.
4. Track your dispute status: Most of the disputes get resolved within 30 days, and you can track updates online.

Example:

Amit's credit report inaccurately reflected an unpaid loan of ₹1,00,000, lowering his score from 780 to 650. He raised an online dispute, provided his bank statements as evidence, and within 25 days, his score was reinstated.

Why Is It Important?

• One mistake will decrease your score by 50 to 100 points.
• Credit card limits, interest rates, and loan approvals rely on a credit report free of errors.
• Correcting errors promptly enhances your creditworthiness.

Step 5: Wait for Resolution—How Long Does It Take?

After filing a dispute, you’ll need to wait for the credit bureau to investigate and resolve the issue, which usually takes 30 to 45 days.

Example:

Why Tracking Your Dispute Is Important?

• Follow up in case of delays—some cases take longer than anticipated.
• If declined, request details and call the lender themselves.
• After correcting, recheck your credit report to make sure the correction is correctly noted.

Step 6: Avoid Future Mistakes on Your Credit Report

Correcting mistakes is one thing, but preventing them from recurring is even better. Use the following tips to maintain an error-free and accurate credit report.

Example:

Kavya had repaid her ₹3,00,000 education loan two years ago but never verified whether it was reflected in her credit report. When she applied for a credit card, she was dismayed to notice that it still showed as "active"—diluting her score from 750 to 680.

 A quick credit report verification could have prevented rejection!

Step 7: Consolidate Debt to Manage Loans Wisely

It can be complicated to manage several loans, but debt consolidation streamlines repayment by consolidating all loans into one low-rate loan. This lowers your overall interest expense and simplifies finances.

Why Go for Debt Consolidation?

1. Lower Interest Rate: Pay Less Interest

• Example: Raj had three loans carrying an average rate of 24%. He rolled them over into one loan for 12% and reduced his yearly interest payment from ₹48,000 to ₹24,000, saving ₹24,000 a year.

2. Simpler Loan Management: One EMI, Less Hassle

• Example: Meera was managing four separate EMIs monthly. Post-consolidation, she pays a single fixed EMI, which is simpler to monitor and avoids confusion.

3.  Improves CIBIL Score: Increases Loan Eligibility

• Example: Suresh's credit card was 80% used, which affected his CIBIL score. Consolidating and settling his card balance reduced his utilisation to 30%, which enhanced his score by 45 points in months.

4.   Avoids Late Payment Charges: Saves Penalty Charges

• Example: Pooja had missed two EMI payments within a year and had paid ₹4,000 in penalty charges. Since she shifted to one auto-debited EMI, she never skips a payment and saves on penalty charges.

Example: Amit's Debt Before and After Consolidation

Before Debt Consolidation

After Debt Consolidation

Results After Debt Consolidation:

• Monthly EMI lowered from ₹19,000 to ₹12,000 (₹7,000 savings per month).
• Total interest saved every year: ₹15,000+.
• The CIBIL score increased by 40 points because of timely payments.

Step 8: Final Checklist Before Applying for a Loan Again

Before applying for a loan, make sure your financial record is healthy and free from errors. A minor error in your credit report may result in higher interest rates or loan rejection.

Final Checklist to Abide by:

1. Check Your Credit Report: Recheck your credit report once again to make sure all information is correct.
   
   
2. Ensure No Errors Are Left Unresolved: Challenge and correct any incorrect loan entries, late payments, or duplicate accounts before applying.
   
   
3. Maintain a Healthy Credit Mix: Having a balanced blend of secured (home/car loan) and unsecured (personal loan/credit card) credit increases your score.
   
   
4. Keep Your Credit Utilisation Below 30%: If your credit limit is ₹1,00,000, aim to keep your outstanding balance at less than ₹30,000 to have a strong score.

Example: How This Makes You Get a Loan Easily

Before borrowing money, check your credit report, correct mistakes, and keep your credit file balanced to have increased chances for loan approval and reduced interest rates!

Conclusion

Your credit report is the make-or-break factor for your financial plans. One mistake can bring down your score and result in surprise loan rejections. Periodic checks of your report, identifying errors, and disputing them within time ensure your score remains intact.

Correcting mistakes is simple—just file a dispute with the credit bureau and monitor the correction. Most errors are fixed within 30 to 45 days, which instantly increases your credit score.

Apart from corrections, develop a solid financial discipline—pay EMIs on time, maintain low credit utilisation, and have a good mix of credit. A solid credit score translates into easier loan approvals, lower interest rates, and hassle-free financial opportunities. 

Be proactive and ensure your credit report is free from errors!

FAQs

• How often do I need to review my credit report?

At least every two years, you can identify mistakes before they cause any problems.

• Will a small error impact my credit score?

Yes! Even an erroneous late payment will lower your score dramatically.

• Does it cost anything to dispute a mistake?

No! Credit bureaus do not charge for disputes.

• How soon will my CIBIL score improve after correcting errors?

It can take 30 to 60 days for the corrected data to be reflected in your score.

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About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?